Woolies chief questions regulation call

Date: February 22 2013

Woolworths has questioned calls for more supermarket regulation as the competition watchdog signals a renewed focus on market power.

The Australian Competition and Consumer Commission has flagged it will heavily scrutinise the highly concentrated supermarket and fuel sectors amid claims the retailers have mis-used their market power by squeezing suppliers.

But Woolworths chief executive Grant O'Brien says more regulation isn't the answer and denies Woolworths is intimidating its suppliers, althoug he's admitted an anonymous complaints hotline for suppliers has uncovered a few cases of wrongdoing.

‘‘When there are calls for regulating choice in a supermarket, I really start to wonder where the Australian consumers’ interests are being prioritised,’’ he told the Queensland University of Technology forum late yesterday.

Mr O’Brien also insisted that Woolworths was not intimidating its suppliers.

‘‘We have a very strict code in our business and all of our buyers, those people in contact with suppliers, have to go through that process before they’re allowed to be a buyer,’’ he said. ‘‘We have a zero tolerance for anything that goes outside those codes.’’

But Mr O’Brien admitted an anonymous hotline for suppliers to lodge complaints had uncovered a few cases of wrongdoing.

‘‘Very few because we get very few calls,’’ he said.

Mr Sims said that since the last ACCC inquiry in 2008, global groceries giants had entered the Australian market and increased price competition.

‘‘Aldi are are two to three times the size of Woolworths, Costco have come - they’re bigger," he said.

While Woolworths has defended its internal code, it continues to work with its main rival Coles, the Australian Food and Grocery Council and the National Farmers’ Federation on an industry wide code.

In a separate speech on Thursday, ACCC chairman Rod Sims said the idea of a new code had merit, as long as breaches could be prosecuted under the Competition and Consumer Act.

AAP

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